ICBA to Fed: Speed Up FedNow Launch
Washington, D.C. (Sept. 10, 2020) — The Independent Community Bankers of America (ICBA) today called on the Federal Reserve to accelerate implementation of its FedNow real-time payments service. In a comment letter, ICBA said the Fed should provide more information to future users, engage stakeholders in developing the system, and work with private-sector providers to support a swift launch.
"While ICBA acknowledges the complexity and enormity of effort to create a new instant payment service, we also recognize the pressure resulting from the current environment where a private sector real-time network is already live and expanding its reach," ICBA wrote. "ICBA recommends proceeding to market with the service as soon as practically possible before the 2023 or 2024 implementation timeframe."
In its letter, ICBA applauded the Fed's decision to develop FedNow, preserve choice in instant payments providers, and limit system access to banks eligible for Reserve Bank accounts. However, the agency's phased approach to introducing FedNow features over time hasn't sped up its expected introduction.
To help the Fed roll out the system more quickly, ICBA urged the agency to:
- Expand transparency in the system's development, by releasing more information to community banks and other users to plan for a swift and smooth launch.
- Engage with future FedNow users as part of the development process, by including community banks in FedNow pilot programs, ensuring integration with core processors and digital banking vendors, and pursuing interoperability with The Clearing House's Real Time Payments Network.
- Ensure open and transparent rulemaking, by following the usual notice and comment process and aligning rules with TCH's RTP network.
ICBA and the nation's community banks are strong supporters of the Fed's decision to launch FedNow and look forward to continuing to work with the agency on this critical service.
The Independent Community Bankers of America® creates and promotes an environment where community banks flourish. With more than 50,000 locations nationwide, community banks constitute 99 percent of all banks, employ nearly 750,000 Americans and are the only physical banking presence in one in three U.S. counties. Holding more than $5 trillion in assets, nearly $4 trillion in deposits, and more than $3.4 trillion in loans to consumers, small businesses and the agricultural community, community banks channel local deposits into the Main Streets and neighborhoods they serve, spurring job creation, fostering innovation and fueling their customers’ dreams in communities throughout America. For more information, visit ICBA’s website at www.icba.org.
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